State officials on Thursday said that 2019 is expected to have the most oil exploration and production rig activity in 20 years, but it will take a while for the state to cash in on that increased investment.<\/p>\n
In August 2018, research firm IHS Markit labeled Alaska’s North Slope as a “super basin,”<\/a> and estimated that crude oil output could increase by as much as 40 percent in the next eight years. Even before that, bullish ConocoPhillips officials were declaring an “exploration renaissance”<\/a> for North Slope oil.<\/p>\n Department of Natural Resources officials spoke to the Alaska Senate Finance Committee on Thursday, explaining their excitement about the future of oil in Alaska. DNR Deputy Commissioner Sara Longan was one of them.<\/p>\n “The classification of the North Slope as a super basin is a pretty big darn deal,” Longan said in an interview after the meeting, “and there’s so much undiscovered potential in Cook Inlet also, that industry’s going to keep looking at Alaska to invest money.”<\/p>\n Graham Smith, the permitting section manager for the Division of Oil and Gas, said in a phone interview Friday that the DNR presenters were actually fairly conservative during their Thursday presentation. They said there could be more than 15 oil rigs operating in the North Slope and Cook Inlet in 2019, but Smith said there could be up to 20 operating.<\/p>\n At the highest production time in 2018, Smith said, 11 rigs were running.<\/p>\n “That would be a high, certainly for the last 20 years, probably much longer than that,” Smith said.<\/p>\n While senators were pleased to hear the news, they were hesitant to get overly enthusiastic. Sen. Natasha Von Imhof, R-Anchorage, said in an interview that state officials should “manage their expectations” when it comes to oil.<\/p>\n During her portion of the presentation, Division of Oil and Gas Director Chantal Walsh acknowledged that just because there’s exploration doesn’t mean money is about to come streaming in.<\/p>\n “Exploration, though, doesn’t immediately lead to production,” Walsh said. “In other words, it doesn’t lead immediately to adding money to the state general fund but it is an exciting indication of the component of our state’s oil and gas, which is a large part of our financial stability in the private world.”<\/p>\n Oil revenues for the general fund are expected to dip in the coming fiscal year from $2.211 billion in the current year, to $1.688 billion (23.6 percent), according to Tangeman’s presentation Wednesday.<\/p>\n